I am currently the President of my University's Trading club and I'm looking for ways to help make the club more exciting than just discussion, networking, and education. I want to be able to come up with a competition/competitive event for teams of individuals to compete to test quantitative skills. I want the skills to be very related to quantitative trading/proprietary trading/market-making, and I want to keep financial knowledge to as minimum as possible so STEM majors have equal footing to compete against those majoring in Finance. I know RITC had various companies design problems for a case-study competition and I'm hoping to do something similar in the Spring, but for just an introductory competition to help new members get to know each other and have a fun event to compete in for prizes, how would you structure it?
This is what I am currently thinking:
1) Mental-math challenge (Choose one person from the team, or take team average). 2 Tries on arithmetic.zetamac + 1 try on the "TradingJobs" Optiver Practice Test from 2018.
2) Sequences challenge (Choose one person from the team. Not sure how to say team average as I wouldn't want them sharing answers from the best person). Solve as many as possible in X minutes
3) Brain-Teasers (Team Event) Solve as many brain teasers as possible one at a time collaborating as a team.
4) Market-Making Challenge (Team Event) - Given an orderbook, options chain, and stock prices, spot arbitrage opportunities and explain the best potential trade. Ie stock trading at 49.95-50.00, $60 put trading at 10.15-10.30, see the arbitrage opportunity, sell the $60 put, delta-hedge position and effectively make $15 (0.15100) per put sold. 60-50.00 = 10.00 with no-arbitrage argument, however we can sell our put for 10.15 giving 0.15100 profit per put sold. I could make this much more complex and have multiple different arb opportunities. I also would like to have an ETF arbitrage case, in which I would show ETF A B C with the same underlying components and different weighting. Quote a price of the stocks and ask whether or not there are arbitrage opportunities between ETFs and how to hedge underlying components out of the ETFs etc.
5) Probability/Statistics - This is where I might be giving STEM majors who have taken more advantaged probability/statistics courses an advantage so I'm not sure if I should include this as an event.
Does anyone have any other suggestions for mini-events whether it be for a team to send one individual to compete or the team as a whole? Or maybe how I should weigh the different events?
Do an open outcry challenge. See if you can get some old floor traders to help with it
Just googled that and I feel like it's a great idea haha exactly the suggestion I was looking for. I'll definitely look into implementing that as I think it would be fun, however the school is very very heavy focused on engineers who tend to be very very quiet and it seems like there's an equal weighing of younger members and older members. I'm kind of wondering if the louder/older members would have an innate advantage over the new members who are just adjusting to campus, but I guess that's the nature of the game haha if you don't speak you won't be heard.
Maybe you could do a trading contest on pre-made platforms for algorithmic trading? Regardless of what your algo trading strategy is, making a system for collecting data, backtesting, and executing simulated trades is very time consuming and not practical for a fun contest like this.
If you're referring to point 3 I was kind of thinking like a written case study problem with orderbook prices and liquidity and theoretical opportunities for arbitrage based on some like parameterizable variables such as "Ok guys you're all given a market depth of 500 options, so you can buy or sell 500 at the given bid-ask for all these trades" "Bid ask for stock is 1500 49.95-50.05 1500" things like that
I got one of my first jobs thanks to one of those. I'd say one of the biggest issues is that winners tend to have very little risk management. They overload on a handful of trades that are active for whatever reason, get lucky in that relatively short timeframe and take it home.
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